Not-for-profit entities must allocate joint costs from combined educational campaigns and fundraising solicitations between program costs and fundraising costs if certain criteria are met, according to the Financial Accounting Standards Board. (mlrpc.com)

If the joint cost criteria are not met, all costs of the joint activity should be reported as fundraising costs, including costs that otherwise might be considered program or management and general costs if they had been incurred in a different activity. (mlrpc.com)

These entities should weigh the cost-benefit to allocating joint costs, especially in primarily fundraising cases in which it might be very difficult to determine the appropriate allocation of these costs. (mlrpc.com)

FASB ASC 958-720-55-2 includes a flowchart that depicts a decision tree for helping to determine whether not-for-profit entities have joint activities and, if so, how joint costs should be allocated. (mlrpc.com)

Costs of goods or services provided in exchange transactions that are part of joint activities, such as costs of direct donor benefits of a special event - a meal, for example - should not be reported as fundraising. (mlrpc.com)